General Mills said the item expects to finance the transaction with debt in addition to also cash on hand, along with about $1 billion in equity. The company expects the deal to close by the end of 2018.

The deal gives the Betty Crocker owner a path into the quickly growing pet food category, as sales of traditional packaged foods continue to slow. For Blue Buffalo, the item gives a stronger distribution foothold to big box retailers — outlets the pet food maker only began to explore last year, when the item began selling in stores like Target.

Pet food in addition to also care remains a point of growth inside consumer industry. In 2017, consumers spent $20 billion on pet care, $10 billion of which was on dog food, according to Nielsen.

The booming business of pet care has attracted investment by traditional consumer companies, including those that will want to fortify their pet business in addition to also those like General Mills that will want to jump into the item fresh.

M&M-owner Mars has been building its pet business, which includes the Iams, Pedigree in addition to also Whiskas brands, to help compensate for slowing confectionery sales. the item has aggressively bulked up the business, including its 2017 acquisition of animal hospital company VCA Inc. for $9.1 billion. Jam-owner J.M. Smucker bought Big Heart Pet Brands for roughly $6 billion in 2015, marking its entrance into the pet industry.

Manufacturing food for pets in addition to also humans requires similar equipment, so the item is usually not hard for a traditional food company to move into the space, industry experts say.

General Mill’s plans to acquire Blue Buffalo come as all traditional food companies are on alert about a prowling 3G Capital, the backer of Kraft-Heinz, known for its ferocious appetite to acquire food companies in addition to also its ruthless cost-cutting approach once the item owns them. The ketchup giant recently suggested the item may be ready for its next acquisition, in addition to also General Mills has been identified as a logical target.

the item also comes as Big Food is usually progressively moving away by its bolt-on acquisitions of smaller, growth companies in favor of bolder deals that will can make a more immediate impact. Large food companies have struggled to grow smaller brands, in addition to also the pressure by lagging food sales in addition to also constrained retailers has continued to intensify.

The deal is usually anticipated to be neutral to the company’s cash earnings per share in fiscal year 2019 in addition to also will add to earnings in fiscal year 2020.